Whiplash claims and crash figures don’t add up

Road accident figures and insurance claims analysed together for the first time show that the number of whiplash claims are outstripping the number of injury accidents reported to the police.

Police accident statistics show a 20% rise in the number of injury accidents since 2006 – but claims for whiplash injuries have increased by 40% in the same period.

The analysis highlights that in 2011, there was an 11% fall in injury accidents reported, but a 6% increase in whiplash claims.

This raises the cost of motor insurance for all genuine customers, says the report from the Institute & Faculty of Actuaries (IFA), but notes the extra costs are not paid by motorists as average car insurance premiums fell by 7.1% in the same period.

Lawyers are blamed for the increase – with the cost of a whiplash settlement averaging £8,400.

IFA chairman David Brown said: “All of the updated data that we have collated supports the conclusion that claims management companies have had a marked effect on the number of small injury, whiplash-like, claims.”

The report says that the injuries have cost car insurers around £400 million and pinpoints Birmingham as the hot spot for fraudulent claims.

Although the number of authorised claims management companies has dropped by 5%, their turnover was up 21% to £455 million in 2011, according to figures from the Ministry of Justice.

“This is good news for the consumer, but it does raise the question of how sustainable this is for insurers,” said Brown.

Birmingham has 11 of the top 20 postcode districts originating whiplash claims. The top six were all from Birmingham, with Manchester taking the 7th, 9th and 14th positions.

The 18 postcodes with the lowest number of whiplash claims were all in Scotland, excepting one neighbourhood in Newcastle-upon-Tyne.